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Shell Midstream to Seek $785M in IPO

Shell Midstream Partners LP, the oil and natural gas pipeline company backed by Royal Dutch Shell plc, will be seeking more than $785 million in an initial public offering (IPO) on the New York Stock Exchange.

Shell, which plans to begin trading on Oct. 28, announced in June it would launch the IPO as a fee-based master limited partnership (MLP) (see Daily GPIJune 18).

It is going to offer 37.5 million shares at $19.00-21.00/share, according to a regulatory filing on Monday with the Securities and Exchange Commission. Shell, through one of its subsidiaries would own about three-quarters of the midstream units after the offering.

The midstreamer initially would own stakes in Zydeco Pipeline Co. LLC and Mars Oil Pipeline Co., one of the biggest oil pipeline operators in the deepwater Gulf of Mexico. The two systems link major onshore and offshore production areas. Zydeco would include the Houston-to-Houma, LA (Ho-Ho) oil pipeline system; Mars is a major corridor crude oil pipeline that originates about 130 miles offshore in the deepwater Mississippi Canyon area, including the Olympus platform, and the Medusa and Ursa pipelines, and from the Green Canyon and Walker Ridge areas via the Amberjack pipeline connection.

Among other things, the MLP also initially would own stakes in Bengal Pipeline Co. LLC (49%) and in Colonial Pipeline Co., the largest refined products pipeline in the United States.

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